Curve Finance founder Michael Egorov told Cointelegraph he is calling for a fundamental reset. DeFi protocols need to abandon inflationary token emissions. Instead, they should generate yield from real economic activity.
His timing isn’t random. DeFi’s total value locked has fallen approximately 38% over the past six months. Protocols are rethinking strategies that defined the sector’s explosive 2020 growth.
“Your yield should come from revenues, not from tokens,” Egorov said. Sustainable returns must link to actual economic activity. Think trading fees. Not token emissions.
He went further. Protocols without genuine utility should reconsider launching tokens altogether. That directly challenges the playbook from DeFi summer. Triple-digit rewards rapidly attracted capital back then.
Egorov argues tokens should function primarily as tools. For decentralization and governance. Not speculative vehicles.
Protocols risk classification as traditional regulated financial services without meaningful decentralized control. That erodes crypto’s core value proposition.
He contrasts the 2020 environment with today’s landscape. Back then, outsized rewards let investors largely ignore risk. Now users demand technical safety “for at least years.”
The Curve founder isn’t alone in this reassessment. Polygon Labs CEO Marc Boiron has criticized inflationary emissions. They create “temporary illusions of success.”
Ethereum co-founder Vitalik Buterin recently weighed in too. “DeFi’s real value lies in redistributing risk, not merely generating fiat-denominated yields on stablecoins.”
These converging perspectives signal something bigger. The industry is rethinking how yield, risk, and governance function in onchain finance.
Egorov notes that speculative attention has migrated toward meme coins. That’s draining what he calls “speculative premiums” from DeFi tokens. Now they’re forced to trade more on fundamentals.
Retail traders have flocked to perpetual futures. They hit $1.37 trillion in monthly volume in October 2025. Meanwhile, institutional players accumulate spot positions.
The shift reflects hard lessons. A cycle marked by protocol failures and security breaches left users more cautious.
Durable DeFi protocols must compete on real revenue generation now. Capital efficiency matters. Long-term security matters. Flashy, emissions-driven annual percentage yields don’t cut it anymore.
For an industry that once prided itself on innovation through incentives, the message is clear. Sustainable growth requires economic substance. Not just token mechanics.
